External Checklist for Homebuyer Loan Closing



Overview

A minimum of 45 days prior to expiration of the contract, the Administrator must submit documents to complete the homebuyer loan closing.

To provide adequate time to release all relevant liens, the Administrator may not schedule the homebuyer loan closing until 45 days after the Department receives the Certificate of Completion for construction activities.

Document Submission Checklist

The following list should be used as a due diligence checklist of documents that the Administrator is required to submit to the Department in preparation for each homebuyer closing.

The documents should be submitted as one document in PDF format. Each document must have a bookmark with a description of the document, i.e. “Household Income Certification”. If the PDF is not bookmarked, the activity may be placed in deficiency status and a deficiency may be issued.

• To create a bookmark in Adobe Acrobat, navigate to the front page of the document which requires a bookmark. Press ctrl+B . A navigation pane will appear to the left, and the bookmark is created. It will be labeled Untitled by default. Click on the label, and rename the bookmark.

• If the file is too large to upload to the Housing Contract System, the file can be optimized which will reduce the file size. To optimize a PDF document in Adobe Acrobat, click “Document” on the menu bar. Select the “Optimize Scanned PDF” option. A box will appear with a slider bar function at the top. Move the slider toward the left, reducing the size of the PDF. Select “Okay” at the bottom right hand corner of the box. The file will automatically optimize and save.

• Save the file utilizing the following format:

o Household last name – Homebuyer Loan Closing Packet – Date.pdf

The packet must be uploaded into the Housing Contract System as an attachment to the activity

❑ Executed sales contract and any applicable amendments

❑ Title insurance commitment effective within 30 days of closing date

❑ Tax certificate

❑ Hazard and flood, if applicable, insurance binders

❑ Certificate of Occupancy

❑ Preliminary Closing Disclosure

❑ Updated Single Family Development Loan Analysis

Closing Costs

Administrators can expect the following loan closing costs, some of which are eligible costs in the development budget:

❑ At least one year of hazard insurance (and flood insurance, if applicable)

❑ At least two months of property taxes and insurance for the escrow reserves, which cannot be financed with HOME funds

❑ Escrow, closing, or settlement fees

❑ Title insurance policy

❑ Recording fees

❑ Federal Express or UPS costs if charged by title company

❑ Tax certificate fee

❑ Survey fee

❑ Attorney’s fees

❑ Appraisal fee

Fees for closing costs, as well as tax and insurance reserves may not exceed the amounts customarily charged in the area.

Prohibited Fees

No origination or discount fees are permitted to be charged to households. Additionally, other than for the homeownership education class, the Administrator may not charge the applicant any fees other than actual third-party charges.

Outstanding reimbursements to the Administrator, such as the developer fee, will be settled following the successful closing of the homebuyer loan.

Homebuyer Loan Closing

Closing must be conducted at a title company or an attorney’s office.

❑ Closing must be attended by all household members named on the loan documents and by the individual who has been authorized to execute legal documents on behalf of the Administrator. Attendance by a consultant, if applicable, or the Building Contractor is optional.

❑ The Administrator must pay all closing costs and submit an electronic draw request via the online TDHCA Housing Contract System (followed by submission of required support documentation) for reimbursement of closing costs incurred. These transactions may be table funded if the complete packet is submitted no less than 60 days from the expiration of the contract.

❑ Closing costs must be identified in the project’s itemized budget.

❑ The Administrator will submit to required documents to the Performance Specialist for the contract no less than 45 days prior to the expiration of the contract. When all the correct documents are received, the Performance Specialist will forward the related support documentation to the Loan Closing Specialist.

❑ The Department’s Legal Division will prepare all real estate loan documents and send them directly to the title company via overnight delivery.

❑ The title company and the Administrator will schedule a closing date in accordance with the instructions provided in the loan closing instruction letter.

Post Closing Requirements

Upon completion of closing, specified loan documents must be recorded in the County Clerk’s office for the county in which the assisted property is located. The Administrator must ensure the recorded original documents (referred to as “trailing documents”) are forwarded to TDHCA.

Reasonable accommodations will be made for persons with disabilities and language assistance will be made available for persons with limited English proficiency.

|[pic] |Texas Department of Housing and Community Affairs |[pic] |

| |Street Address: 221 East 11th Street, Austin, TX 78701 Mailing Address: PO Box 13941, Austin, TX 78711 | |

| |Main Number: 512-475-3800 Toll Free: 1-800-525-0657 Email: info@tdhca.state.tx.us Web: tdhca.state.tx.us | |

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HOME Single Family Development Program

External Checklist for Homebuyer Loan Closing

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